Mobile application revenues set to soar

Mobile apps stores will increasingly adopt a value-added services model

The proliferation of mobile apps stores will push direct and indirect revenues from mobile applications to more than $25bn (£17bn) by 2014, according to the latest figures from Juniper Research.

The analyst firm's Mobile Applications & Apps Stores: Business models, Opportunities & Forecasts 2009-2014 whitepaper suggests that, while the vast majority of application revenues derive from one-off download charges, there is a growing shift towards in-application billing.

This increasingly value-added services model will help generate incremental revenues from additional mobile content, and is set to become the dominant revenue stream by 2011, according to the report.

Juniper said that data revenues associated with application usage, rather than those obtained from the retail price, will provide the greatest benefit in the longer term.

The company also noted that many top-level operators will probably seek to deploy their own apps stores to maintain a consistent level of content revenue share.

"Data revenue growth is dependent on operators embracing policies which enable open access, which also involves facilitating app stores which compete with their on-portal offerings," said Dr Windsor Holden, the report's author.

With this in mind, Holden stressed the importance of operators rejecting the "walled garden" approach to help stimulate competition and provide users with a diverse choice of applications and delivery models.

In keeping with the move towards a value-added services model, the research anticipates that games will remain the largest category in terms of overall app downloads and revenues, but that multimedia and entertainment apps will begin to generate the greatest overall revenues from next year.

At a device level, while the current focus is on developing app stores for various smartphone platforms, the report advises developers and content providers to cater for feature phones and other mobile devices, particularly for content delivery and subscription applications that can create continuous revenue streams.